Access Denied: The trouble with going cashless

Amazon’s new grocery store has economists once again pondering a future where humans are replaced by automated systems — first they came for the pump jocks, then the courtesy clerks. What’s next, the cabbies? But there are other reasons to be concerned about the human-less, cashless future that retail giants seem to be building.

The only transactions occurring at Amazon’s new grocery store are conducted through the Amazon Go app, which means no cash, no debit card and no EBT. Customers must have a smartphone, be able to connect their bank account to it, and have money in the bank to use the store.

To the surprise of many of Amazon’s higher-earning employees, for whom swiping in and out feels greatly convenient, this is a tall order for a lot of workers in the city.

Despite the ubiquitous nature of smartphones, millions of Americans still don’t have app capability right in their pocket. Pew Research found that in 2016, 77 percent of the U.S. population had a smartphone, up from just 35 percent five years prior. That’s a quick adoption — but it also goes to show that even the most popular technology takes some time to trickle down. Broken out by age and income bracket, phones that can also pay for groceries are less and less common; among households earning less than $30,000, 36 percent do not have a smartphone. And fewer than half of Americans over the age of 65 have one.

Going cashless disproportionately impacts seniors and lower-income individuals, but it also presents a problem for individuals who, for many reasons, don’t have access to banking. For example, it’s difficult to open a checking account without a fixed address, citizenship papers or limited English. The United States government estimates that as many as 25 percent of American households are unbanked (i.e. do not use a financial service at all) or underbanked (have a checking or savings account, but also use other services, like payday lenders or expensive check-cashing services).

Unsurprisingly, it’s the lowest-income families who are the most likely to be fully unbanked.

Cash also remains a lifeblood for many off-the-books economies; day laborers, gig workers, sex workers and folks working in the hospitality sector rely on cash. I remember working as a barista at a shop that accepted tips in cash only. There were days where the change in the tip jar barely covered the ride to work.

“Sorry,” my customers would say sheepishly, “I never carry cash.”

The push toward a cash-free economy is largely driven by those who find carrying cash to be inconvenient; however, for those who rely on cash transactions, innovations such as the Amazon Go grocery store are much more than just an annoyance. They’re another way that technology has bypassed benefiting the most marginalized people in favor of making life easier for rich people.

Hanna Brooks Olsen is a writer and policy consultant. Her work has appeared in The Atlantic, The Nation, Salon, Fast Company and Vice. View previous Access Denied columns.